New USDOT Rules Improve Annual DBE Certification Process

Disadvantaged business enterprise owners must do paperwork to stay certified.

Source : Contractor News

June 24, 2024

Author : Alex Bustillos

Suppose your business identifies as a Disadvantaged Business Enterprise (DBE). In that case, you must be certified to get access to the large projects and funding opportunities that are explicitly allocated for minority-owned and women-owned businesses. To classify as a DBE, the business must be 51% owned by people(s) identifying as socially and economically disadvantaged. 

The US Department of Transportation (USDOT) considers certain groups, like women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian-Pacific Americans under this category.  The US DOT also has a business cert program for service-disabled veterans.

Other factors that determine one's eligibility for DBE certification are business size, personal net worth, control, and independence. Federal, state, and local agencies often have allocations in their projects and funding for DBEs to promote better access to projects. But to bid for these, small businesses must be certified as DBEs, without which you are ineligible.

But, how do DBE's know when they need to reapply for certification annually? 

The answer is that's it no longer required. According to the newly revised final rule, certified DBEs are no longer required to undergo recertification every year. The DBE rather just needs to provide the certifier (state DOT or transit authority) with the annual declaration of eligibility (DOE) and the annual receipt of the last completed fiscal year. 

The DOE is a sworn statement that there have been no changes in the DBE's circumstances that would impair its eligibility and that any such changes have been disclosed to the certifier. 

Gross receipts are determined on a cash basis (an update to previous regulations that were silent on this topic), independent of the DBE's overall accounting method. 

DBEs must also notify their certifier of any significant changes that influence their continuous eligibility within 30 days of the occurrence. 

These points will ensure the business continues to meet the DBE eligibility requirements.

Under the new provisions, the certifying agency can conduct a review at regular intervals of two years. This would include an on-site review of the DBE’s office and records.

If the business fails to meet the eligibility criteria, the certifier can revoke the certification of the business following the § 26.87 of the regulation to remove the DBE's certification.

Category : Department of Transportation Diversity Outreach

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